Economic Data Summary - Q2 GDP was revised up from +3.3% to +3.8%, marking the strongest quarter of growth since Q3 2023 [2] - Consumption saw a significant increase from +1.6% to +2.5%, indicating a stronger appetite among U.S. consumers [3] - The Price Index increased by 10 basis points, with headline at +2.1% and core at +2.6% [3] Job Market Insights - Initial Jobless Claims fell to 218K, down 17K from estimates and 14K from the previous week, reaching the lowest level since mid-summer [4] - Continuing Claims rose slightly to 1.926 million, remaining below 1.94 million for the third consecutive week [5] Durable Goods Orders - August Durable Goods Orders increased by +2.9%, significantly better than the prior month's -2.7% and the consensus estimate of -0.5% [6] - Excluding Transportation orders, the increase was +0.4%, down from +1.0% in the previous month [6] Trade and Inventory Data - The Advanced U.S. Trade Balance for August improved to -$85.5 billion from -$102.8 billion [7] - Advanced Retail Inventories remained unchanged at +0.2%, while Advanced Wholesale Inventories decreased to -0.2% [7] Company Performance Expectations - Costco is expected to report fiscal Q4 results with a projected earnings growth of +12.8% year over year and revenue growth of +8.1% [10] - Costco has outperformed earnings expectations in three of its past four quarters [10]

Core Viewpoint - The recent decision to remove the 11% import duty on cotton in India has sparked mixed reactions, highlighting the tension between the textile industry and cotton farmers, with the former seeking relief from high tariffs and the latter facing economic distress due to low yields and rising production costs [1][3][5]. Group 1: Industry Impact - The removal of the import duty has led to a surge in demand for foreign cotton, providing a much-needed lifeline for exporters and mill owners facing challenges from U.S. tariffs [5][6]. - The textile sector in India has struggled to compete with neighboring countries like Bangladesh and Vietnam, which benefit from lighter duties and taxes [3]. - The U.S. accounts for 28% of India's total textile and apparel exports, valued at approximately $11 billion annually, making the textile industry highly sensitive to trade policy changes [13]. Group 2: Farmer Concerns - Cotton farmers are experiencing significant economic pressure, with yields as low as 400 kilograms per hectare compared to Brazil's 2,200 kilograms per hectare, leading to calls for higher minimum support prices (MSP) and debt waivers [1][7][14]. - The timing of the duty removal coincides with the cotton harvesting season, raising concerns among farmers about its impact on their livelihoods [8][9]. - Farmers have expressed alarm over rising production costs and stagnant yields, emphasizing that the issue is not solely about duties but about survival [7][9]. Group 3: Political and Economic Context - The political backdrop is tense, with the U.S. pressuring India to open its agricultural markets, which has fueled resentment among Indian farmers [10][11]. - Industry representatives have suggested a seasonal compromise, proposing that duties be dropped during the off-peak months to balance the needs of both farmers and the textile industry [12]. - The government faces challenges in balancing global trade pressures with domestic agricultural priorities, reflecting broader contradictions in India's economy [16][17].

Inflation Metrics - Personal income increased by 04% in July, aligning with expectations [1] - Spending rose by 05% in July, meeting expectations [2] - Real spending, adjusted for inflation, increased by 03%, matching expectations and marking the best performance since March [2] - Month-over-month PCE increased by 02%, consistent with May's level [3] - Year-over-year PCE stood at 26%, precisely as anticipated [3] - Core PCE year-over-year reached 29%, slightly higher than the previous month's 28% [4][5] Trade Balance and Inventories - The trade deficit came in at negative 103 billion, exceeding expectations of negative 902 billion, and approaching the record deficit of negative 161 billion from March [6] - Wholesale inventories increased by 02% in July (preliminary) [6] - Retail inventories also increased by 02% in July [6] Market Reaction - The 2-year Treasury yield decreased slightly from 364% to 363%, compared to last Friday's close of 370% [7] - The 10-year Treasury yield remained relatively stable at 421%, unchanged from yesterday's close but lower than last Friday's close of 426% [7]